KUALA LUMPUR: Main Market-bound CPE Technology Bhd is seeking to raise RM179.58 million from its Dec 7, 2023 initial public offering (IPO) to drive its expansion plans.
Chief executive officer Lee Chen Yeong said its objective to list is to speed up the engineering support services provider’s growth and potential.
“The bulk of our proceeds will go towards the construction of new plants and the purchase of machinery and equipment to optimise production to cater to the increasing demand, both locally and internationally,” Lee said at the launch of its prospecturs today, adding that it has an unbilled order book of RM69.27 million.
Lee said part of the proceeds will be utilised to purchase raw materials such as stainless steel and aluminium from overseas suppliers.
He said stocking these raw materials on site will help CPE Technology maintain ample supply while simultaneously mitigating rising shipping costs due to price fluctuation.
He said RM69.60 million of the IPO proceeds will be used to acquire industrial land and new plant construction; RM32.88 million for new machinery and equipment, and relocation of existing machinery and equipment; RM17.45 million to repay bank borrowings; RM46.91 million for working capital; RM1.42 million for capital expenditure and RM11.32 million for listing expenses.
According to the prospectus, based on the issue price of RM1.07 per share and the enlarged issued share capital of 671.31 million shares, the company will have a market capitalisation of RM718.31 million.
The group said Malaysia’s total engineering supporting industry (ESI) was worth RM9.98 billion in 2023 versus RM9.37 billion a year ago, with CPE Technolgy having a 1.55 per cent share of the 2022 market, generating revenue of RM145.35 million.
The group said ESI will expand at a compounded annual growth rate of 8.2 per cent to reach RM13.88 billion in 2027 with technology advancement and expansion in end-user markets to spur growth.
He said there are headwinds in the semiconductor industry but the market remains promising. – BK